AUD/USD: Still no sign of any bounce

The Aussie posted new lows after this morning’s lower-than-expected retail sales (+0.2% MoM Vs +0.4%) but we are now back where we started at 1.0210. The fall has been stalled for now, with AUD/JPY buying out of Tokyo providing some welcome relief, but there is no sign of any major relieving bounce as yet so best to stick with the short-term down-trend and sell into rallies back towards yesterday’s 1.0250 breakdown point.

My wave analysis seems validated. Yesterday failure to break the lowed end of the channel suggests that we will now have to test the upper side of the channel. The absense of a rate cut today by the ECB could stimulate a move toward the upper edge of the channel in the 1.300.

I am on hold after being trapped yesterday in a fake breakout of the 1.288 barrier. I will add to my short position when we get closer to the 1.300. Today the market is bullish, so one can try to be long in my opinion.

I still stick to my general assessment that we will not exceed 1.316 (probably not even 1.305) until Spain makes a request for a bailout and the ECB starts buying its bonds. Despite all the dollar bearishness, the market will continue to pressure the european leaders to act. My key measure for this theory are the yields on the spanish bonds that I follow everyday.

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